In futures trade on the COMEX division of the New York Mercantile Exchange, gold for August delivery fell $1.00 to settle at $261.00 per ounce. Spot bullion was quoted at $259.20/70, compared to the late fix at $260.00 and the previousNew York close at $260.30/80. Britain's announcement last month that it would shed 58 per cent of its 715-tonne gold reserve rocked a market already jittery about Swiss and International Monetary Fund sales plans, tipping wavering sentiment towards full-scale disinvestment.

Gold tumbled $33, or about 10 per cent, from a two-month bullion high near $290 per ounce on May 7 to $256.90 on June 10, the lowest since mid-May 1979. The market was anticipating Britain's 25-tonne auction on July 6, the first of five to takeplace by March 2000. "Once the sale has taken place and results are announced, I think a lot of the pressure will be off the market and the sale itself will be discounted," said Don Tierney, of Pell Brothers Trading.

"Apparently a lot of people who want to be short, whether funds or trade houses, have their positions intact and they are not willing to add on." The metal's historic role as the anchor of the global monetary system has been steadily chipped away at in recent years. Some centralbanks have sold non-interest bearing gold, or facilitated forward sales by lending to miners and speculators, who then sell the borrowed metal forward, expecting to buy it back cheaper for a profit in the future. "Gold is on a path of evolution away from being a closely held store-of-value asset," said Kevin Crisp, vice president offoreign exchange and commodities research at JP Morgan. "I believe that the next five years may see fluctuations in the dollar price of gold of $100 or $150 over periods of months," crisp told the 350 conference delegates on Tuesday.

With dormant inflation reducing investors' need for a hedge against the erosion of value of paper assets, gold has increasingly been seen as just another commodity. "It seems that we have to accept that gold is perceived to be no longer unique. We cannot just sit back and hope that it will sell itself as it used to. Gold must be advertised, marketed, promoted, sold like any other prestigious high-quality merchandise," said Neil Hewitt, a goldconsultant to investment banks J Aron and Goldman Sachs.

Many miners agreed with South Africa's Anglogold Ltd, the world's biggest miner, that producers should stop taking physical gold demand for granted. "Seventy per cent of gold producers spend not one cent on their product." said Anglogold executive director of marketing Kelvin Williams. Williams said that miners have to do more to help the gold jewelry industry and abandon the "dangerous" mindset that the two industries were totally separate.

On Monday, South Africa's central bank suggested that future official sector sales should be conducted through the Bank for International Settlements, to ensure transparency and stability in the gold market. Switzerland is planning to sell up to 1,300 metric tonnes of its gold, having voted in April in a national referendum to abandon th Swiss franc's link with gold. The IMF is considering selling up to 300 tonnes of gold to finance debt relief for poor nations. The industry-funded World Gold Council tolddelegates that sales by the IMF are not a done deal and may still be vetoed by the US Congress.

In other precious metals, July silver fell 5.5 cents per ounce to $5.05, trading between $5.10 and $5.02. Spot bullion was at $5.05/08, versus the fix at $5.0725 and the previous close at $5.10/13. NYMEX July platinum fell $6.50 per ounce to $356.20 and September palladium fell 85 cents to $337.65.